1. Gerald Company uses perpetual inventory system. The company has purchase and sales as shown below:

March 1Beginning inventory 200 units @ $4

March 10Purchase 500 units @ $4.5

March 15Sales 500 units

March 20Purchase 400 units @ 4.75

March 25Sales 400 units

March 30Purchase 300 units @ $5

Instructions:

Determine the cost of ending inventory and the cost of goods sold for March under FIFO.

2.At the end of Victoria store fiscal year on December 2019, these accounts appeared in its adjusted trial balance:

Freight in$15,000

Inventory$80,000

Purchases$1,170,000

Purchases discount$10,600

Purchases return and allowances$5,800

Sales revenue$2,000,000

Sales return and allowances$56,000

Inventory as December 2019$109,200

Instructions:

Prepare income statement through gross profit for the year ended December 2019.

3.Hamilton company uses the allowance method to estimate uncollectible accounts receivable. The company produced the following aging of the accounts receivable at year end.

(in US$)

Number of days outstanding

Total

0-30

31-60

61-90

91-120

Over 120

Accounts receivable

193,000

70,000

46,000

39,000

23,000

15,000

% uncollectible

1%

3%

5%

8%

10%

Estimated bad debts

Instructions:

calculate the total estimated bad debts based on the above information

prepare the year end adjusting journal entry to record the bad debts using the aged uncollectible accounts receivable determined in (a). assume the current balance in allowance for doubtful accounts is a $3,000 in debit.

The company collects $5,000 subsequently on a specific account that had previously been write off. Prepare the journal entries necessary to restore the account and record the cash collection.